The treaty was signed by John Tsang, Hong Kong's financial secretary and Christine Lagarde , the French minister of economy, industry and employment on behalf of their respective governments at the end of October, after nearly a decade of negotiations.

Only the 15th such agreement signed by Hong Kong with a partner country, the treaty aims to prevent double taxation of individuals and companies who have links to both countries, and encourage mutual investment.

Previously, Hong Kong residents with businesses in France or French businesses operating in Hong Kong were taxed in both jurisdictions. Now, they will be taxed only once.

David Anderson, a tax expert at law firm Sykes Anderson said: "This double tax treaty will encourage Hong Kong investors to view France in a positive light. Given the difference in tax treatment in France between treaty countries and non-treaty countries, the treaty should open up a wave of investment from Hong Kong into France.

"The main purpose of the treaty is to eliminate the possibilities of double taxation on income tax and wealth tax," he continued. "It also acts to reduce the withholding tax which is applied in France on dividends from French companies to Hong Kong shareholders. As such the terms of the treaty are itself are helpful for anyone investing from Hong Kong into France and vice versa.“

The new treaty has been greeted especially warmly by real estate companies in France. Before the treaty was in place, Hong Kong-based investors in French real estate, many of whom are expats, faced prohibitively high taxes, with companies having to pay a charge of three per cent of the gross value of their properties every year. Many of these charges have now been abolished.

Nick Leach, director of Pierre & Vacances property investment arm said: "Hong Kong is one of our most important expat markets alongside Dubai and Singapore. We have plenty of interest from bankers and lawyers based out in Hong Kong, who have a considerable amount of disposable income, and are looking for attractive investment opportunities.

"France, in particular, has always attracted the expat investor, with Paris and the Alpine region proving particularly popular with Hong Kong investors. And now that another tax barrier has been removed, we are bracing ourselves for a big rise in interest from the expat investor community in Hong Kong."

John Busby, director ofAthenamortgages.com, a French mortgage broker, said he was also expecting the treaty to increase interest in French property from expat investors based in Hong Kong. "We experienced a similar spike in interest from buyers and agents in the Channel Islands, when a tax treaty with France was agreed earlier this year," he said.